Just Now Emerging, the Softswitch Market Will Top $5.7 Billion in 2004, IDC Forecasts

FRAMINGHAM, MA – JUNE 14, 2000 – Although the softswitch market is still unproven, telecommunications vendors are excited about its potential and are aggressively moving to establish advantageous positioning. Despite the market's immaturity, it is already overpopulated with large and small players alike. According to IDC, vendors' enthusiasm for softswitches is well-founded. IDC estimates the worldwide market will explode into a $5.7 billion opportunity by 2004 — this from a market that is barely shipping products today.


"The softswitch market is a new and immature market with extraordinary growth potential for the right vendors with the right technology, strategy, and paths to market," said Tom Valovic, research manager for IDC's IP Telephony program. "Softswitches will become the centerpiece of next-generation networks, and in the course of time they will become a critical element in any service provider's overall network."

Softswitches are software on a high-availability computing platform that controls the flow of voice and data traffic in a converged telecommunications network and mediates signaling between Internet protocol (IP) and public switched telephone network (PSTN) subdomains. IDC believes softswitches have the capability to transform the PSTN, but warns the concept has yet to be proven on a large-scale operation.

The softswitch market has many product and technology interdependencies. In fact, IDC believes most of the growth in softswitch development will come from associated sales of media and access gateways to service providers modifying networks for better data integration, developing greenfield networks, or converting traditional networks to gradually incorporate IP-convergence capability for both voice over IP, fax over IP, and new services. As a result, to succeed in the softswitch market, vendors will have to establish effective partnerships.

"Moving beyond the realm of voice and fax, vendors will need to take a fresh look at the services market, be aware of innovative service implementations already offered on the Web, and encourage a new mindset to avoid recycling ideas," Valovic said. "The real market opportunity for softswitch vendors will be to develop creative and innovative services as well as to empower this development among end users."

IDC's new report, Softswitch Market Analysis: Reinventing the PSTN (IDC #B22341), analyzes the emerging market and its effect on the PSTN. The report looks at the origins of the market and provides a technology overview. It discusses factors driving and inhibiting market growth and analyzes market trends and developments affecting the competitive landscape. Worldwide revenues are forecast through 2004, segmented by region. The report also looks at the vendors competing in the market and examines what it will take for them to succeed. To purchase this report, contact Bruce Atlas at 1-800-343-4952, ext. 4053 or at batlas@idc.com.

About IDC

IDC delivers dependable, high-impact insights and advice on the future of ebusiness, the Internet, and technology to help organizations make sound business decisions. IDC forecasts worldwide markets and trends and analyzes business strategies, technologies, and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC provides global research with local content through more than 500 analysts in 43 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, ebusiness companies, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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